--%>

Private closed economy based question

The data of columns 1 and 2 of the below table are for a private closed economy. Given the original $20 billion level of exports, determine the equilibrium GDP if imports were $10 billion greater at each level of GDP? 

 

328_Private closed economy.png

E

Expert

Verified

Imports = $40 billion: In the private open economy aggregate expenditures would fall by $10 billion at each GDP level and the new equilibrium GDP would be $300 billion.

   Related Questions in Finance Basics

  • Q : Explain Fiscal Committees Fiscal

    Fiscal Committees: The committees of members in every house of the Legislature which review the fiscal impact of proposed legislation, comprising the Budget Bill. Presently, the fiscal committees comprise the Senate Budget and Fiscal

  • Q : Frequency Distribution What is

    What is Frequency Distribution? Compare Categorical Frequency Distribution, Ungrouped Frequency Distribution, Grouped Frequency Distribution?

  • Q : What is Budget Change Proposal Budget

    Budget Change Proposal (BCP): It is a proposal to modify the level of service or funding sources for activities sanctioned by the Legislature, suggest new program activities not presently authorized, or to remove existing programs.

    Q : Define Expenditure Expenditure : The

    Expenditure: The expenditures reported on a department’s annual financial reports and “past year” budget documents comprises of amounts paid and accruals (comprising encumbrances and payables) for obligations made for the fiscal year

  • Q : Describe the primary variables in EOQ

    Describe the primary variables being balanced in the EOQ inventory model? Clarify In the EOQ model the primary variables being balanced are carrying costs and ordering costs. The more frequent orders are placed the lower the firm's carrying co

  • Q : Capital investment appraisal methods

    The capital investment appraisal methods like NPV, IRR, ARR, PV and Time value of money have become irrelevant post Celtic Tiger. Due to the depth of the recession companies do not have budgets to invest. Explain? At first use this

  • Q : Meaning of invisible hand Normal 0

    Normal 0 false false

  • Q : Explain intermediation Explain

    Explain intermediation.The financial system makes it achievable for surplus and deficit economic units to come together, exchanging funds for securities, to their mutual profit. While funds flow from surplus economic units to a financial institu

  • Q : Compare and contrast the book value and

    Compare and contrast the book value & liquidation value per share for common stock. Is one method more reliable? Describe.The Book Value of a firm's common stock is found by subtracting the value of the firm's liabilities, and preferred stoc

  • Q : Describe why measure projects risk as

    Describe why we measure a project's risk as the change in the CV.We measure a project's risk since the change in the coefficient of variation since this focuses on the change in the riskiness of the firm's existing portfolio.